The Naira, Nigeria’s currency, recorded a significant appreciation against the US Dollar on Friday at the foreign exchange market.
The Naira closed at N794.89/$1 at the official market, gaining N161.44 or 20.31% from N956.33/$1 on Thursday. This is the first upward movement of the Naira since Monday.
At the parallel market, the Naira also improved marginally, trading at N1,115/$1 on Friday, up from N1,170/$1 on Thursday. However, the Naira still faces a huge gap between the official and the parallel rates, reflecting the scarcity of forex in the country.
The Naira’s appreciation came despite a decline in the forex turnover at the end of the trading session. The forex turnover was $75.82 million on Friday, down by 28.13% from the previous day.
The Central Bank of Nigeria (CBN) Governor, Dr Olayemi Cardoso, acknowledged the challenges facing the forex market and assured the public that the CBN would be transparent and fair in its interventions. He spoke at the 50th-anniversary event of the Chartered Institute of Bankers of Nigeria (CIBN) on Friday, where he also highlighted the positive effects of the removal of petrol subsidy and the adoption of a floating exchange rate on the economy.
Cardoso, who has failed to hold a Monetary Policy Committee meeting for the second time in two months, expressed confidence and optimism that the CBN would restore macroeconomic stability and address fundamental flaws.
The forex crisis in Nigeria has worsened since the CBN introduced reforms in June this year, aiming to unify the multiple exchange rates and improve liquidity. However, the reforms have not yielded the desired results, as the demand for forex continues to outstrip the supply.